When you’re a solo entrepreneur — especially one selling creative services — pricing is something that can be somewhat etherial. What is it? Who sets it? Why is one price acceptable, and another isn’t? Is it the same for every client, or do you give some clients discounts
This leads most people to just picking a price based on what the competition is doing or what their magic 8-ball tells them. Then they maybe “get around” to raising their prices every year or two.
Coming from someone whose prices started low and quickly increased to 500% of the original price, there are some tell-tale signs to look out for that say you are ready to raise your prices. They are…
Sign #1: Demand Goes Up
The age-old rule of economics: supply and demand. When demand of something with a limited supply goes up, the value of said object is also supposed to go up.
As a creative solo entrepreneur, you do have a limited supply. There’s only one of you. And you only have the same 8,760 hours in a year (without sleep) that the rest of us have.
If you get to the point where you feel overwhelmed — like you have more work than you are able to handle, it’s time to raise your prices until the amount of work coming in gets down to a manageable level (or hire someone).
Sign #2: You No Longer Need the Money
This is a great position to be in, but rare for those in their 20s. If you are in a position where you have the money you need and are set for life, then you can essentially price yourself at whatever you like. You don’t need the money, so it doesn’t matter if you get 20 “no”s before getting a single “yes”.
Sign #3: Not Enough “No”s
Most people love hearing the word “yes” over and over again when they pitch their services. It’s a great feeling, and my self live for that feeling.
However, when I get too many “yes”s in a row, I start to get a little nervous, because I know I have done something terribly wrong — I have set my prices waaaayyy too low.
“No”s are good for your business because they keep you in-demand and they show you that your prices are in that “sweet spot.” “No”s also keep you on your toes in terms of your marketing and the value you deliver to your clients.
Sign #4: Your Competition is Higher
I almost never recommend pricing yourself based on the competition, but if you take a look around and realize that people are charging much more for the same exact service that you provide, it’s time to consider raising your prices.
I just raised my Web Design prices, and this sign was the last step. Since it’s a relatively new business, I set my prices for other entrepreneurs pretty low. That being said, I just received over 70 qualified leads, so my demand is much higher now. Then, someone sent me another Web Designer’s prices and I saw that I was slightly lower than them.
5. You’ve Niched Down
The best way to raise your prices confidently is to niche down into an industry that can afford it. For example, I am able to charge my Health Care Web Design clients much more than my solo entrepreneur clients, because these are full organizations. I do give them a few extra benefits for their buck, but I am mostly able to charge more because I have niched down. I am considered the expert in that niche.
You can do the same, and should. The more specific you get about who you serve and what ways you can benefit that specific type of customer, the more you can charge.
Pricing is one of the most common things I get asked about by everyone via Email. Did this help clear anything up? Do you have any other specific questions? Leave a comment below!